Norton Rose Fulbright, Herbert Smith Freehills and Osborne Clarke wind back cost-cutting measures after performance exceeds expectations
A trio of top City outfits are paying back the cash they received as part of the government’s furlough scheme.
Norton Rose Fulbright, Herbert Smith Freehills and Osborne Clarke performed better than expected since the onset of the pandemic and, as a result, have wound back cost-cutting measures.
Earlier this year corporate law firms took steps to curb the financial fallout brought on by the coronavirus. These included lawyer pay cuts or freezes, partner payout deferrals, delays to bonus decisions, and the furloughing of staff.
NRF has recently repaid furlough money used to support “a small number” of business services and secretarial staff. It has also called time on its scheme to allow staff to switch to a four-day working week for reduced pay.
Meanwhile, HSF has paid back money to HMRC it accepted in July. It brought back “a small number” of furloughed employees in London the same month after “stronger business performance than we had initially anticipated”, the firm’s executive partner, Alison Brown, said in a statement.
Osborne Clarke announced last week it had brought back 116 furloughed members of staff, including business support staff and paralegals, in August, and repaid government funds it received as part of the furlough scheme. Ray Berg, managing partner, said the firm’s half-year results had held up “better than we had initially feared”.
As well as furloughing staff, OC had taken the “unfortunate but prudent decision” to cut staff pay by 7% for a 11-month period starting in June. The pay reduction applied to employees earning more than £30,000 but the firm said, however, that if it meets its new financial target for 2020-21, it will repay employees back.
It appears other City law firms are considering making similar moves to repay government furlough money. The Financial Times (£) reports Gowling WLG entered into talks on Tuesday to decide whether to pay back HMRC, while Eversheds Sutherland and Mishcon de Reya are also consulting.
